rabble blogs are the personal pages of some of Canada's most insightful progressive activists and commentators. All opinions belong to the writer; however, writers are expected to adhere to our guidelines. We welcome new bloggers -- contact us for details.

The Potash contradiction: Cracks in neo-liberal ideology?

Please chip in to support rabble's election 2019 coverage. Support rabble.ca today for as little as $1 per month!

I have argued that ideology makes you stupid and if you have power it makes you dangerous. One of the best examples is the idiocy of more and more tax cuts with the supposed goal of making Canadian business internationally "competitive." First, tax rates regularly come about sixth or seventh down the list of factors that actual CEOs look at when deciding whether or not to invest. For large firms, the tax bill often makes up less than two per cent of total costs. Secondly, huge amounts of the revenue raised by taxes actually go to things that actually do make Canadian business internationally competitive: advanced education, efficient infrastructure, abundant energy supply, Medicare (and the healthy workers it maintains), a stable society. Medicare, for example, saves the Big 3 auto companies $1,500 per automobile compared to costs in the U.S. (where unions have to bargain for company health plans in their contracts).

The drama playing out around the Potash Corporation of Saskatchewan suggests that just maybe some of these neo-liberal ideologues are finally coming to their senses and realizing that it matters if they have revenue. Premier Brad Wall, the leader of the Saskatchewan Party is an extremely right-wing politician, basically a retread of Grant Devine the former Conservative premier who almost destroyed the province in the 1980s. He drove the province's debt through the roof by gutting oil and gas revenues.

Ironically, it was also Grant Devine who privatized the then crown-owned Potash Corporation. By doing so he robbed the province of billions in profits that could have made Saskatchewan almost as wealthy as its Alberta neighbour.

But now conservative Wall is rejecting the take-over of PCS by the giant BHP Billiton Corporation of Australia. For a free-market politician constantly singing the Open for Business hymn, this is a dramatic turnaround. The reasons are interesting, too. It is all about government revenue. A Conference Board of Canada study commissioned by the province calculated that the province would lose at least $2 billion in tax revenues over 10 years. The province adjusted that to $3 billion -- because BHP will borrow billions to pay for the deal and deduct the interest costs from its taxable income.

It gets even worse. BHP plans to kill the marketing agency that keeps the price of potash relatively high. That, along with BHP's pledge to run its two planned mines at full capacity no matter what the market conditions, means Saskatchewan is slated to lose $5.7 billion.

The right-wing premier has been making statements worthy of the Allan Blakeney, the NDP premier who nationalized the potash industry back in 1975. Stated Wall: "The potash resource doesn't belong to any company. It belongs to the people of Saskatchewan. We will protect the economic and strategic interests of the people of Saskatchewan."

Globalization isn't dead yet but it is facing contradictions it cannot solve with the simple application of the old Washington Consensus model -- privatization, deregulation, free trade, tax cuts and slashing social programs. There is enormous pressure on countries now to protect themselves from the ravages of transnational corporate power and the likelihood of another financial meltdown in the future. Allowing all the major mining companies in Canada to be scooped up by foreign companies is now looking foolish even to those who yesterday were trumpeting them as part of the wonderful capitalist system.

The borderless world is redrawing national boundaries many thought were gone for good. Currency wars, competition for real investment (and not just mergers and acquisitions), sovereign debt crises and falling consumer spending all have governments dusting off their governance tools -- even as they slash spending which will exacerbate their national problems.

Even more interesting from an ideological point of view is Wall's other reason for trying to kill the deal (a power only Ottawa has). Wall stated bluntly that he didn't trust BHP to keep even its inadequate promises. Referring to extravagant promises made by the buyers of other mining giants in recent years, Wall stated: "These are promises and in every single takeover of a natural resources company in our country of late, promises have been made and promises are broken and Investment Canada has been letting the companies off the hook."

Maybe Wall just likes being premier of a "have" province. With all three of the province's key natural resources -- oil and gas, uranium and potash -- booming, Wall's status amongst provincial premiers is high. But by intervening so openly in the "marketplace" in what can only be called a hostile attitude towards investment, he is breaking the faith with all the other ideologues still genuflecting. Once that faith is broken, the precedent has been set and other provincial premiers are going to be asked what they will do the next time a major company is threatened. Wall is opening a political can worms.

Stephen Harper will be thinking about that when he makes his decision about the deal in early November. Wall is close to Harper and the pressure will be considerable to do as he asks and kill the deal. Harper is a calculating politician. He might just consider the Conservative seats in Saskatchewan safe no matter what he does. But there are a couple of seats that could easily go NDP, giving the party a foothold again in the province of its birth. He also has to consider seat-rich Ontario where the next election will likely be won or lost. Still smarting from the broken promises of earlier deals, allowing this one to go forward would remind Ontarians that Harper doesn't give a damn about them or anyone else.

Thank you for reading this story…

More people are reading rabble.ca than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable.

rabble.ca has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.

Comments

We welcome your comments! rabble.ca embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on rabble.ca and your privacy here. Please keep in mind:

Do

  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.

Don't

  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.